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Negative Side Effects Of Low Interest Rates?


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Are not the benefits of a low interest rate cancelled out by inflation?  When I bought my first house in the early 1990s, I paid only $45,000 dollars, but had a mortgage with an interest rate of 8%.  Similar homes on the market in my area today are going for around $100,000 with an interest rate of around 4.5% depending on your credit rating.  

 

I have noticed similar situations with farm equipment.  A tractor my father purchased when I was in kindergarten cost $14,000 would cost at least $90,000 if it was new today.

 

Even worse, a forage harvester that we purchased 6 years ago cost $38,000 would cost us $85,000 today!

 

Inflation stings!  

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